Another KiwiBuild development backed by taxpayer money is failing to generate buyer demand - prompting calls for the flagship house building programme to be dumped.

The Wanaka development's already come under scrutiny after slow sales - now KiwiBuild houses are sitting unsold in Canterbury.

Under the contracts, the developer can now either sell unsold houses on the open market at a cheaper price, with government topping up any shortfall, or the developer can require the government to buy back the homes.